Oil Prices Slide 2% as Markets Brace for Bessent’s ‘Economic D-Day’

Oil prices dipped by over 2% on Monday as traders liquidated positions and awaited details of a fresh U.S. sanctions package against Iran. WTI futures settled at $85.18 per barrel, down 2.16%, while Brent futures fell to $92.32 per barrel, slipping 2.19%. Both benchmarks had jumped more than 5% last week amid ongoing threats between the U.S. and Iran, dwindling Iranian crude exports, and a near halt in tanker traffic through the Strait of Hormuz.

The recent decline appears to be primarily profit-taking rather than any substantial improvement in the geopolitical landscape. A potential silver lining for market participants is the absence of confirmed attacks in the Strait of Hormuz over the past 48 hours, which might be due to the reduced tanker flow.

CENTCOM reported that the U.S. embargo on Iranian ports has redirected 70 commercial vessels and sunk three so far. Meanwhile, Iran is intensifying its control over strait traffic, listing several vessels that allegedly violated transit rules and warning of future penalties. The next significant driver in oil markets will be U.S. Treasury Secretary Scott Bessent's scheduled press conference at 2 p.m. on Monday, where he is expected to unveil new economic measures against Tehran.

Bessent described the forthcoming campaign as an "economic D-Day" and specifically targeted countries and entities that buy, transport, and facilitate Iran's oil, as well as those who overlook seaborne transfers of Iranian fuel. If these measures effectively deter buyers and intermediaries, the oil market could tighten further.

In response, Mohsen Rezaei, the newly appointed head of Iran's Supreme National Security Council, cautioned that any country involved in the U.S. economic campaign would be deemed an "act of war." Iran's President Masoud Pezeshkian maintains his support for the June deal with Washington, describing diplomacy as the best way out of the current situation.

However, Pakistan's Army Chief Field Marshal Asim Munir is set to visit Tehran on Monday as Islamabad seeks to reunite the U.S. and Iran for fresh talks. For now, investors will be closely monitoring the specifics of Bessent's announcement on Monday and whether it could significantly curb Iranian oil exports or prompt Tehran to escalate the conflict.